Ask HN: When to buy vs rent servers?
I am wondering, at what point does it make sense to own your own servers (and switches, routers, whatever) as opposed to rent them monthly through a VPS service?
Also, which Windows VPS provider do you recommend?
Also, which Windows VPS provider do you recommend?
8 comments
[ 5.8 ms ] story [ 20.9 ms ] threadWhen your cost of capital is less than the hosting company's cost of capital plus the hosting company's markup.
New startups have a very high cost of capital -- because there's a high risk of them not paying money back, investors demand high rates of return -- so for a young startup renting is generally better than buying. Large well-established companies have a very low cost of capital -- banks will happily loan them money at 5% interest -- so for them it's worth buying hardware.
Figure out where you are on the spectrum and do the math.
If you can live on a VPS or two you shouldn't even be thinking of buying.
There are however, three reasons, why you might consider buying over renting.
1. Cost -- Renting is more expensive than buying. At some point it probably make sense to buy. You can buy the individual machine and co-lo or you can buy the datacenter. Depends on your needs.
2. Control -- For whatever reason, you need more control. Maybe it's specialized hardware or something that you can't easily do on a rented machine.
3.Pride -- This is one that basically is asking to shoot your self in the foot. A lot of guys want to have the server closet. Once you are established, maybe it's worth it. Not from a cost or control standpoint, but maybe its worth it.
You can buy a very cheap server that's much more capable than a cheap VPS server. Here are some decent servers for about $300; you can often find good servers for $150:
http://www.geeks.com/products_sc.asp?Cat=821
Colocation at a good facility costs $60-100.
So for $150-$300 upfront and $60-$100 monthly, you can have a capable server hosted at a good facility at a much cheaper cost than the equivalent "rented" server.
You can use a VPS or something like EC2 as a hot backup, setup replication, and have a very capable setup for not a lot of cost.
This assumes that you have sys admin skills.
If you're OK with the servers being hosted in Germany, you can rent a quite powerful dedicated server from http://hetzner.de for roughly the same amount of money.
Look for the EQ4-10 servers (http://www.hetzner.de/en/hosting/produktmatrix/rootserver-pr...)
I've been with them for almost a year now and I can only recommend them.
The ones for < $890 are running NetBurst Xeons ... which means, at the youngest, they're nearly 4 1/2 years old.
The one at $890 uses a Xeon 5120 which at least gets you into the Core Xeon era, but you're still looking at a more than 4 year old processor.
If you are going to cheap-out, at least do yourself a favor and buy something low-end-but-new from somewhere like Dell. You can pick up a new PowerEdge T110 from Dell for $400 which comes with a only-released-a-year-ago Xeon X3430 which is going to be about 3 times faster than that Xeon 5120. Plus you're going to have a faster FSB, memory, drives, networking, modern interface to upgrade with, etc.
If you're looking at spending $1k/yr for colocating your server, make it worth it by co-loc-ing a server that's not 5 years old.